What it is
When a company issues shares, each share has a face value. In Nepal that is Rs 100 for almost every listed company.
Share capital (also called paid-up capital) is the number of shares times Rs 100. It is one of the most useful lines on the balance sheet: it tells you how many ordinary shares exist, once any preference shares are taken out.
Bonus shares raise this line because new shares are issued from reserves. Rights shares raise it because investors pay in new money.
Some banks also issue preference shares: shares that pay a fixed dividend and usually carry no vote. Their capital sits inside the share capital line but they are not ordinary shares, so EPS, net worth per share and P/E leave them out and use the ordinary share count the filing prints.
How it is calculated
Share capital = ordinary shares × Rs 100 + any preference share capital. Ordinary shares = ordinary share capital ÷ 100. Per-share figures (EPS, net worth per share, P/E) use ordinary shares only.
Worked on Nabil Bank Limited, FY 2082/83 Q4
NABIL's share capital of Rs 3,205.70 crore at the end of FY 2082/83 Q4 includes Rs 500 crore of preference shares. Per-share figures use its 27,05,69,970 ordinary shares, as the filing does, not the whole line divided by 100. Net profit of Rs 790.58 crore divided by those ordinary shares gives the reported EPS of about Rs 28.36.
What good looks like
It should match NRB's minimum paid-up capital for the class of bank. Growth here comes from bonus or rights shares, not from profit. More shares means each share's slice of profit is smaller unless profit grows too.
Watch out
- A bonus share makes this line bigger and EPS smaller; nothing real changed.
- Share capital is not the bank's 'capital fund' for NRB purposes; that is a wider measure.
- The market price has nothing to do with the Rs 100 face value.
- Some banks carry preference shares inside share capital (NABIL has Rs 500 crore). Dividing the whole line by 100 then overstates the ordinary share count.
In Nepal
NRB set a minimum paid-up capital of Rs 8 arba for commercial banks in the FY 2072/73 monetary policy, which drove the wave of mergers and bonus issues; development banks and finance companies have lower floors. NRB's capital adequacy framework measures 'capital fund', of which paid-up capital is only one part. Preference shares count toward paid-up capital but are not ordinary shares; NABIL's share capital includes Rs 500 crore of them.
Questions
The same profit is split across more shares. Your total earnings as a holder are unchanged; the per-share number is just diluted.
Ordinary share capital ÷ 100, because the face value is Rs 100. If the bank also has preference shares, leave them out; the filing prints the ordinary share count it uses for EPS.